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Telenor Group establishes Norwegian passive fibre company, divests minority stake in it

7 Oct 2022

Norwegian telecoms giant Telenor Group has announced the establishment of a passive fibre infrastructure ownership company in its home country, while also confirming an agreement to divest 30% of this new entity – Telenor Fiber – to a consortium led by KKR.

In a press release, Telenor Group said that the newly established company will own the group’s passive fibre assets in Norway which include 130,000km of cables, connecting upwards of 560,000 premises. It is understood that the company’s assets will be transferred from Telenor Norge in a demerger process prior to completion of the transaction. Meanwhile, Telenor Norge will be the company’s only customer and all operational processes ‘remain under full [Telenor Group] control’. Telenor Group claims to have conducted an extensive consultation process with the relevant government authorities, which are said to have given their overall feedback that the transaction ‘safeguards critical security and regulatory considerations’.

With regards to the sale of the minority stake in Telenor Fiber, it was noted that the agreed sales price represents an enterprise value for the fibre business of NOK36.1 billion (USD3.41 billion), resulting in proceeds of approximately NOK10.8 billion for the Norwegian group. The transaction is expected to be completed in ‘early 2023’ and Telenor Group has said it intends to use part of the proceeds for share buybacks ‘to mitigate the effects of the new minority interest’.

Commenting, Telenor Group EVP and CFO, Tone Hegland Bachke, said: ‘We are executing on the strategy presented at the Capital Markets Day in September. This transaction highlights the value in our infrastructure and unlocks capital to support continued high fibre rollout in Norway, and we are bringing in strong investors with a long-term horizon … We believe this transaction benefits our stakeholders while safeguarding future investments in Norway’s fibre.’

Norway, Kohlberg Kravis Roberts & Co (KKR), Telenor Group, Telenor Norge

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